Clarifies that a former spouse's court-awarded interest in a retiree's pension is a property right of the former spouse, and efforts to enforce it do not constitute garnishment.

A BILL FOR AN ACT

SECTION 1. One valuable asset that is often the subject of division in a divorce are the parties' retirement benefits. Often one party is awarded part of a retirement account as a means of equalizing the financial situations. In most sectors of business, including private industry and the federal government, this right is easily enforceable by the former spouse as a property right if the retiree refuses to pay. However, the employees' retirement system of the State of Hawaii has taken the position that the attempts of the former spouse to obtain that property right is, instead, a garnishment, and as the current law prohibits the garnishment of retirement account, the system refuses to enforce the former spouse's right to the account.

The purpose of this Act is to clarify for the state and county system that the former spouse's court-awarded interest in a retiree's retirement account is a property right, and that an effort to enforce it do not constitute garnishment.

SECTION 2. Section 88-91, Hawaii Revised Statutes, is amended to read as follows:

"§88-91 Exemption from taxation and execution. The right of a person to a pension, an annuity or a retirement allowance, to the return of contributions, the pension, annuity or retirement allowance itself, any optional benefit or death benefit, any other right accrued or accruing to any person under this part and the moneys in the various funds created under this part are exempted from any tax of the State and, except as in section 88-92 provided, shall not be subject to execution, garnishment or any other process and shall be unassignable except as in this part specifically provided[.]; provided that assignment of all or a part of a pension, annuity, retirement allowance, or similar retirement benefit vested by this chapter to a former spouse pursuant to a divorce or other order or decree issued by the family court shall be enforceable as a property right of the former spouse and shall not be considered as garnishment. The family court may enforce the foregoing provisions concerning the establishment or division of property rights in family court orders or decrees."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.